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									A Guide To Sources Of
Small Business Finance In The
West Midlands
September 2009

This publication is intended for general guidance only. Professional
advice should always be sought before entering into a financial
commitment, and no responsibility can be accepted for any decision
made solely on the details of any scheme as summarised in this guide.

This document is updated during the year, but grant and loan schemes
are subject to closure or to change at very short notice.

Michael Byrne                             BCT Business Venture Ltd

September 2009                                                       1
GRANTS                                                     PAGE

Access to Work (Supporting People with Disabilities)        4
Agriculture Development Scheme                              4
Redundant Building Grant Scheme (Rural Areas)               4
Rural Enterprise Grant Scheme                               5
North East Birmingham Business Corridor                     5
BT Community Connections (Community Groups)                 5
The Prince‟s Trust                                          5
Carbon Trust                                                6
Craft Council                                               6
Advantage Proof of Concept Fund                             6
Energy Saving Trust                                         7
European Funds                                              7
Film Finance                                                8
Stratford Road Improvement Programme (Birmingham)           8
Trade Show Access Scheme                                    8
Grants for the Arts                                         9
JobCentre Plus Programmes for Self-Employment               9
Small Retailers Capital Fund                                9
Government Grants for Research & Development                10
Support for Business Research & Development                 10
Screen West Midlands                                        11
Sandwell Business Start up Grants                           11
Grants for Business Investment in England                   11
Small Business Rate Relief                                  12
Cleobury County Small Business Grants (South Shropshire)    12
Spinner Programme                                           12
Aston Pride (Aston, Birmingham)                             13
Enterprise with Pride (Aston, Birmingham)                   13
UnLtd (Social Enterprises)                                  13


Arrow Small Business Finance                                14
Career Development Loans                                    14
Aston Reinvestment Trust (Birmingham & Solihull)            14
Banks                                                       15
Black Country Enterprise Loan Fund                          15
Black Country Reinvestment Society                          15
Community Development Finance Institutions                  16
Regional Community Loan Fund (Social Enterprises)           16
Cooperative & Community Finance                             16
Coventry & Warwickshire Reinvestment Trust                  17
Factoring/Invoice Discounting                               17
Future Builders England                                     17
Impetus (Herefordshire/Worcestershire/Shropshire)           18
Michelin Development Fund (North Staffordshire)             18
North Staffordshire Risk Capital Fund                       18
Business Tax Payment Support Service                        18

September 2009                                                   2
The Prince‟s Trust                                                              19
Prime Initiative                                                                19
Royal British Legion                                                            19
Enterprise Finance Guarantees                                                   20
Street UK                                                                       20
Supporting British Businesses in the Current Economic Climate                   20
Social Enterprise Loan Fund                                                     21
Midlands Community Finance (MCF) (East Staffordshire)                           21


Advantage Business Angels                                                       22
Advantage Creative Fund (Arts/Media/Design)                                     22
Venture Capital                                                                 22
Advantage Early Growth Fund                                                     23
Advantage Enterprise and Innovation Fund                                        23
Advantage Growth Fund                                                           23
Adventure Capital Fund                                                          24
Bridges Ventures (Social Enterprises)                                           24
Private Investors (Business Angel Finance)                                      24
Coalfields Enterprise Fund                                                      25
Connect Midlands                                                                25
Enterprise Capital Funds                                                        26
Halal Fund (Islamic Finance)                                                    26
Mercia Technology Fund                                                          26
UK Steel Enterprises                                                            27

Editor’s Note
This guide provides summaries and contact details in respect of commonly used
sources of small business finance, divided into grants, loans and equity. It is not
a comprehensive list, but is an overview of the sources of business finance that
are most frequently of use to people starting or developing a business or a social

The list is compiled from information in the public domain. Schemes are subject
to change at short notice. Larger searchable databases of sources of finance are
available via the internet through and

Some schemes apply across the whole of the West Midlands. However, most are
restricted to special assisted geographical areas, particular communities, specific
business sectors, or for particular business activities.

Michael Byrne

September 2009                                                                        3

Access to Work – support for people with disabilities

Through JobCentre Plus, the Department of Work and Pensions makes available
help for people with disabilities to overcome practical and financial problems in
starting a business.

In addition to advice and information, JobCentre Plus can pay an Access to Work
grant towards the approved extra business start-up costs that arise from a
person‟s disability. These are some of the types of support;

      A support worker or specialist coaching
      Special aids and equipment required in work
      Adaptation to equipment or premises
      Extra travel costs

There is no specific limit to the assistance, but an applicant will have to prove
that they have a viable business, that the expenditure is necessary over and
above normal business expenses and that they cannot fund it themselves.

Contact an Access to Work adviser at a local JobCentre Plus in the first instance.
There is a line for telephone enquires on 01782 382 148 or textphone 01782 382
152 or visit

Agriculture Development Scheme

The ADS is a scheme from The Department for Environment, Food and Rural
Affairs that helps farmers in England improve their marketing. Applications can
be made at any time, and under the scheme grants are given each quarter in a
competitive framework. Grants are only made for non-capital items, which
excludes equipment and machinery. 50% grant aid is available, up to a maximum
of £500,000. The scheme favours advertising or promotion of farming produce
that will have a beneficial effect for the whole industry. This especially includes
those exploiting new markets, promoting collaboration and having lasting

For full information visit or call 08459 33 55 77

Redundant Building Grant Scheme (Rural Regeneration)

This scheme from Advantage West Midlands provides financial support for
refurbishment and conversion of disused buildings in the Rural Regeneration Zone
of Herefordshire, Shropshire and Worcestershire.

Grants of up to 25% of the cost (to a maximum of £62,000) are available to
promote new economic activity in manufacturing, services or retailing. Grants will
not be made to refurbish premises if the proposed investment is economically
viable without financial help.

Visit or call 0121 380 3500.

September 2009                                                                      4
Rural Enterprise Grant Scheme

This is a grant scheme to help fund small scale diversification and business
development in rural areas. It is part of the Rural Development Programme for
England. And is available to farmers and specific rural micro businesses

It is available to businesses located in eligible areas of the West Midlands (determined
by postcode) that are preparing to invest in environmental technologies, food and
drink or tourism.

Herefordshire Council administers the scheme on behalf of Advantage West Midlands
for the whole region

Contact 01432 383616 or visit

North East Birmingham Business Corridor

Birmingham City Council offers a Business Grant Assistance programme to
manufacturing and service sector businesses that employ 5 to 250 employees to help
them improve their land and premises. The programme offers a 30% grant towards the
total cost of; building extensions, new building works, structural alterations,
demolition, land clearance, landscaping, security (including CCTV and grilles) and
car parking facilities.

The minimum cost of project supported is £6,000 and the maximum grant is £50,000.
The project must be located in the north east of Birmingham especially; Nechells,
Washwood Heath, Hodge Hill, and Tyburn.

Visit (Environment & Planning) or call 0121 464 9861

BT Community Connections

This scheme can provide community and charitable organisations with personal
computers and a year’s free broadband connection.

Applications can be made via

Prince’s Trust

The Prince’s Trust is a nationwide charity that helps disadvantaged young people
(Aged 18 to 30) in many ways. The trust concentrates its business support for young
unemployed people through loans to help start a business (see Page 20). However,
they can offer Test Marketing Grants of £250 prior to start-up.

Contact 0121 689 6898 or visit

September 2009                                                                        5
The Carbon Trust

The Carbon Trust is the Government agency that encourages best practice in
energy consumption, and provides businesses with information to review their
energy needs and reduce consumption.      Consultants can visit and survey
businesses whose energy usage exceeds £50,000 per annum.

The carbon trust offers interest free loans of between £5,000 and £100,000
towards spending on projects that will recover the cost over four years in energy
savings. The Energy Technology List is a list of energy efficient equipment that
carry the significant tax savings of 100% capital allowances against profits in the
year of investment.

Please consult for more details.

The Craft Council

In exceptional circumstances, the Craft Council can offer some financial help to
craftsmen & women starting a business.

The Craft Council Development Award comprises a Maintenance Grant of £625
per quarter, and an Equipment Grant of £5,000 or 50% of eligible costs.

Please contact 0207 278 7700 or

Advantage Proof of Concept Fund

The above grant scheme from Advantage West Midlands with the European
Regional Development Fund aims to encourage innovation by assisting new
businesses to fund and carry out market assessments, protect intellectual
property rights, prepare business plans and create prototypes.

The fund provides grants of £15,000 to £30,000 to Universities or SME‟s
developing innovations with significant economic potential. The grants help with
external or third party costs up to a limit of 75%. An independent committee will
consider each application on its own merits. Priority will be give to innovations
in; advanced materials, health, energy and transportation technology and digital

The partners in the fund are Malvern Hills Science Park, Staffordshire Business
Innovation Centre, Wolverhampton University and Connect Midlands. The fund
covers the whole West Midlands region and is available to pre-start and
established businesses.

For  further   information    contact        0845      074     3531     or    visit

September 2009                                                                   6
Energy Saving Trust

Through the Energy Saving Trust supported by the DTI there are opportunities to
seek financial assistance towards the cost of new vehicle technology.

The Transport Energy New Vehicle Technology Fund offers financial
assistance to organisations wishing to demonstrate low carbon technology projects
that use new methods to reduce emissions. Funding is offered towards the cost of
preparing a vehicle or an engine that can run on cleaner, alternative fuels that has
the prospect of full commercialisation. The scheme is open to any company
registered in the UK and can provide a grant of 50% of costs of components,
materials, labour and management costs.

Power Shift Grants are available to individuals or fleet managers to assist with
the cost of converting a vehicle to run on liquid petroleum gas or electricity.

Clean Up Grants can provide companies with financial assistance towards the
fitting of emission reduction technology to commercial diesel vehicles.

Applications can be made on line via and there is a
telephone helpline on 0845 602 1425.

European Funds

European funding is provided through the European Commission to help
businesses across Europe. To apply for European funding you do not always have
to apply to Brussels or Strasburg, as in many cases schemes and programmes
are administered by the UK government or another intermediary like a bank,
agency or local authority. A small or medium sized enterprise (SME) is one that
employs less than 250 employees and has a turnover of less than £36million.
European funding is often restricted to SME‟s. In a variety of ways the EU makes
available funds for grants, loans or loan guarantees. They are also often
restricted to areas of greatest need. The West Midlands is designated an area of
Objective 2 assistance. (2nd highest need)

The European Investment Bank provides loans to SMEs at less than market rates
of interest. These cannot exceed 50% of the investment cost, and must be at
least £15,000. The European Investment Fund provides funds for venture capital
aimed at new innovative technology companies. This is known as the ETF Start-
up scheme.

The European Union provides grants to support (SME) companies with projects to
develop new products or processes. The project must involve co-operation
between at least two countries. Grants are generally 50% of costs of major risky
and innovative technological advances in industry or commerce. Details are
available from the European Programme Integration Centre on tel. 0247 623
6284 or visit

There are many restrictions on who can apply for European funds. For more
information see the business link web-site, which gives
guidance about the types of support available. In addition there is a European
Information Centre (EIC) details of which are on

September 2009                                                                    7
Film Finance

The UK Film Council was established to support filmmakers, and channels Lottery
funding towards training and production. In particular, the Film Council has
established a development fund to promote feature film making and enable UK
film companies to grow sustainable businesses.

The current programmes include;

      First Feature Film Development Programme for emerging filmmakers,
       writers and directors
      Feature Film Development Programme for those with a track record
      Production Company Vision Awards
      Signature Awards for world class writers and directors developing a
       unique style of filmmaking

Funding decisions are made on creative merits as decided by the council‟s staff
using their judgement and experience. Further information is available on or call 0207 861 7511.

Stratford Road Improvement Programme (Birmingham)

Birmingham City Council’s Planning & Regeneration Department can offer
discretionary assistance to any business in the Stratford Road area to improve their
premises. The grant assistance can cover;

   1. Land & Property Improvements. Up to 50% or £50,000 maximum for
      structural works, building extensions, electrical work and shop fronts.
   2. Business Security. Up to 75% or £10,000 maximum for CCTV systems,
      alarms or security doors/lighting.
   3. Fire Safety. Up to 75% or £10,000 maximum towards smoke alarms, fire
      extinguishers or safety doors.

Please contact the Planning & Regeneration Team on 0121 464 9840 for an
application pack.

UK Trade & Investment
Tradeshow Access Programme

The Tradeshow Access Programme provides grant funding of between £1,000 and
£1,800 to small and medium sized enterprises looking to enter export markets to allow
them to attend trade shows with other business. This can be valuable for ‘start ups’
seeking support for marketing costs.

Contact UK Trade and Investment on 0207 215 8000 or visit

September 2009                                                                     8
Grants for the Arts

This is the grant-making programme of the Arts Council. The objectives are to
support full time artists and art organisations, to offer opportunities in the arts for
young people. Grants can be made to individuals and organisations that use the
arts in their work in England. They can be for research, marketing, new
equipment touring, public art and commissioning. They cannot be for general
running costs covered by other income or for self-promotion.

Grants must be linked to artistic and financial need and future plans. Applicants
need to demonstrate their previous artistic achievement and submit a detailed
application form.

Visit or contact Arts Council England (West Midlands) on
0845 300 6200

JobCentre Plus Programmes for Self-Employment

The aim of JobCentre Plus is to help and support people of working age looking
for work. Information is available on and telephone
numbers of local JobCentre Plus offices are in the telephone book. JobCentre Plus
helps unemployed people move into jobs and self-employment by making
available information, advice, training and support.

Help has been available to enter self - employment through New Deal
programmes as part of the Government‟s strategy to help the long-term
unemployed into work. The details and eligibility conditions of these programmes
are available from the local JobCentre Plus and the website
and also on the information line 0845 606 2626. All entrants to these
programmes must apply to JobCentre Plus, who will then refer them to a provider
of training if they are eligible.

In autumn 2009 Flexible New Deal will be introduced. In this programme private
contractors will work with JobCentre Plus offices on the basis of a personalised
approach. They aim to provide support to unemployed people by an emphasis on
helping people progress to sustainable businesses by offering an allowance of £50
for 16 weeks as part of the transition from benefits to self-employment.

Small Retailers Capital Fund

The Home Office has made grants available for owners of small retail outlets to help
them with the cost of preventing crime.

Single retailers can apply for up to £3,000 towards the cost of security or crime
prevention equipment. If they work together with other small shop premises thaey
can apply for a partnership grant of up to £50,000.

Contact 0845 223 5454 for more details, or visit

September 2009                                                                         9
Government Grants for Research and Development

Grant support is available to businesses carrying out highly innovative research
and development, which will produce a significant technological breakthrough.
Four different types of assistance are available.

Micro Projects for businesses with less than 10 employees, where they can
claim 45% of the cost of a project lasting up to 12 months, up to a maximum
amount of £20,000.

Research Projects for businesses with less than 50 employees where they can
claim 60% of the cost of up to 18 months research into product related new
technology. The maximum grant is 100,000.

Development Projects for businesses with less than 250 employees where they
can claim up to 35% of the cost of up to 36 months research into a significant
technological advance, to a maximum of £250,000.

Exceptional Development Projects are development projects of strategic
importance to the UK. The maximum grant aid is £500,000 and the maximum
grant is 35% of the total costs.

Advantage West Midlands will assess all applications, and will award grants to
companies that best meet the criteria of the scheme. They will support those
projects that

      Have the highest level of technological innovation
      Face considerable technical challenges
      Have commercial potential
      Most need assistance
      Can be carried out primarily in the West Midlands
      Have accomplished business managers behind them
      Provide wider benefits such as environmental or social benefits

For more information visit

Support for Business Research & Development

In addition to Research & Development grants (Page 10) the Government has taken a
number of steps to provide greater support to businesses. R & D Tax Credits are
available for all companies as an incentive to invest in innovation. Details are
available on the website and the guidelines have been simplified

The Technology Strategy within the Governments Science and Innovation Framework
to 2010 offers part funding of collaborative early stage research and funding for
knowledge transfer networks Knowledge transfer partnerships are about forging
links between industry and academic establishments, and help firms gain access to
university expertise and resources to help them develop new products.

For more information visit the website of the Department for
Business Innovation and Skills.

September 2009                                                                 10
Screen West Midlands

Screen West Midlands encourages film and programme making in the West
Midlands by supporting local talent and attracting inward investment. Grants
from National Lottery funding can be made to support part of the costs of;

Digital media projects
Feature Film Development
Film Festivals
Educational Projects
Archive Projects

Contact Screen West Midlands on 0121 265 7120 or visit

Sandwell Business Start-Up Grants

The Economic Regeneration & Skills Division of Sandwell MBC offers start-up
businesses support with premises costs through a grant of £1,000 towards the
first year cost of rent and rates. New businesses creating jobs will also qualify for
an additional £500.

Contact Black County Enterprise on 0845 872 4255 or visit

Grants for Business Investment in England (GBI)

GBI is grant aid payable in instalments to assist a „project‟ of capital expenditure
on the launch, expansion or modernisation of a business in an assisted area,
subject to meeting the criteria of the scheme. Assisted areas in the West Midlands
fall into two categories; Tier 2 and Tier 3. Tier 2 covers parts of Birmingham, the
Black Country and North Staffordshire where GBI is available to any size of
business. Tier 3 covers the whole region other than Tier 2 where GBI is only
available to small or medium sized businesses.

A project will be considered for support under GBI in the West Midlands if;

      It requires GBI to make it happen, or without GBI it would go ahead only
       on a smaller scale or over a longer time.
      If over £100,000, the grant must create new jobs or safeguard existing
       ones that would be at risk. The majority of jobs must be skilled.
      It will increase productivity and the business is viable and can be self-
      The business generates regional and national benefits and the bulk of
       finance for the project is coming from private sources
      Not displacing similar employment elsewhere and not excluded by
       European Commission regulations (Steel, Coal or Motor vehicles)

GBI grant will be the minimum that allows the project to proceed. The minimum
level of grant is £10,000. The grant will be between 10% and 35% of the capital
expenditure depending on the location and size of business. Small Enterprises in
Tier 2 are eligible for 35% assistance. The scheme is usually over subscribed.

More details and an application form can be found on

September 2009                                                                    11
Small Business Rate Relief Scheme

There is assistance for small businesses facing large rate bills, occupying
premises up to a rateable value of £10,000. Business properties with a rateable
value up to £5,000 are eligible for 50% rate relief. This falls by 1% for every
£100 of rateable value over £5,000 up to £9,999.

This assistance will only be granted if the business makes a formal written
application no later than six months after the end of the financial year concerned.
Relief is only available for the main property, which must be occupied in the year.
Business premises are exempt from business rates for the first three months they
are empty. Empty industrial and warehouse properties are exempt for a further
three additional months.

For  more     information     about     Small    Business    Rate    Relief   visit

Cleobury Country Business Grants (South Shropshire)

Grants of up to £2,500 or 50% of the total costs are available in Cleobury for new
small businesses (not employing more than 50 people) that are incurring capital
expenditure. This is art of the Cleobury Country Market Towns Initiative.

Decisions on grants are made by a panel that meets regularly, and businesses
receiving grants must pay back the money if the leave the area.

Visit for more details.

Spinner Programme

The Spinner Programme provides comprehensive business support for the
commercialisation of research from local Universities. The programme attempts
to close the „spin-out gap‟ that arises because Universities have a lack of
resources to pursue pre „seed-corn‟ finance activities such as; business planning,
legal and administration issues, intellectual property right protection, interim
management and the production of prototypes.

It plans to help create 40 „spin-out‟ companies by 2010 through two types of
grant. Firstly, Pathfinder Grants up to £15,000 for pre-formation expenses, and
secondly Accelerator Grants of up to £50,000 for the support of businesses after

Further information can be found on

September 2009                                                                  12
Aston Pride (Aston, Birmingham)

This Aston Pride programme in Birmingham helps small businesses to grow and
expand by providing grants towards the cost of purchasing new equipment or
machinery. The amount of capital grant can be up to £7,500, and the applicant must
make a contribution of 50% to the overall cost. There are also grants available for
land and property improvements of up to £50,000 and security grants of up to

Businesses must be located in the Aston pride area and employ less than 50 people.
They must have a complete business plan and have the potential to create new jobs.
The Aston Pride area is located around the Aston Expressway and Aston Park

Call 0121 303 5671 for more information, or visit

Enterprise with Pride (Aston, Birmingham)

Aston Pride also offers grants of up to £2,000 to help create 25 new businesses in
Aston created by local residents.

This is allied to training and dedicated advice and support on essential skills such as
motivation and assertiveness in addition to business planning.

Contact Birmingham Enterprise on 0121 359 2221or visit


UnLtd provides practical and financial support to social entrepreneurs in the UK.
Support is packaged as an award in two levels funded by the Millennium

Level 1 awards are between £500 and £5000. These are designed to help get
ideas off the ground that will improve people‟s lives in disadvantaged

Level 2 awards are between £10,000 and £20,000. These are designed to support
the development of projects that benefit the community.

Only individuals, not organisations are supported. These awards have helped
many people in their early stages who later go on to become self-employed.

For more information visit or call 0121 766 4570.

September 2009                                                                            13
Arrow Small Business Finance

Arrow Loans can be offered to small businesses in Birmingham & Solihull that
cannot raise all the finance they need to expand. Arrow is an arrangement
between Birmingham Chamber and Lloyds Banking Group, and refers applicants
to BCT Business Venture for business advice. Successful applicants must then
bank with Lloyds.

Under this loan guarantee arrangement, three year bank loans of between £1,000
and £10,000 can be offered to start-ups or existing businesses less than five
years old with no more than ten employees. They can be used for working capital
or equipment purchases. Retail businesses and certain other business sectors are
excluded such as Bars, Clubs and Gaming.

The application process includes the assessment of your business plan and your
previous borrowing history. It is not normally possible for an Arrow loan to
replace other loans, or be made to anyone with unresolved county court

For more information visit or call 0121 607 0129.

Career Development Loans

Through the Learning and Skills Council this scheme provides loans through
participating banks to help individuals to improve their employment and career
prospects by undertaking vocational education and training.

Loans can fund any full-time or part-time or distance learning course under two
years in length, including practical experience. The period of repayment agreed
with the bank begin one month after the study period is complete. Applicants
must be over 18 and live and study in Great Britain.

Call 0800 585 505 or visit

Aston Reinvestment Trust (Birmingham & Solihull)

ART (Aston Reinvestment Trust) is a Community Development Finance
Institution. Its capital comes from a combination of private and public sector
sources. ART provides loans to start-up and existing small businesses, social
enterprises and the wider third sector. Loans range from £10,000 to £50,000.
Loans cannot be made to retailers.

The criteria for ART support are:
    The enterprise must be located in Birmingham or North Solihull.
    The proposition must create or preserve local jobs or the local provision of
       important services.
    The borrower must provide a full, viable business plan.
    The borrower must prove that commercial finance is not available.
    The borrower must become a member of ART.

Contact ART on 0121 359 2444 or visit

September 2009                                                                   14

Banks provide a range of finance solutions to businesses including; fixed-term
loans, repayable over an agreed period of time, and overdrafts which are for
short-term finance to cover peaks and troughs in trading income. Banks continue
to be the biggest source of external finance for small businesses, despite the
recent financial crisis.

Overdrafts are a short-term form of finance. Essentially, an overdraft is the
permission to spend more than has been paid in to a Bank Account, up to an
agreed limit. Overdrafts carry a relatively high interest rate and charges.

Business loans are repaid over an agreed time like three years. They can be
unsecured, or secured against a personal asset like a house. A bank will consider
the viability of the business and the credit history of the borrower. Other sources
of finance available from banks that are worth considering are; Leasing, Hire
Purchase, Factoring and Invoice Discounting.

In 2008 even the largest and most prestigious Banks faced commercial
uncertainty. This will have an impact on lending to small businesses for some
time to come. Most Banks offer free banking for a period of 12 to 18 months,
before they charge for transactions. Most publicly funded grant and loan schemes
insist that you have approached a bank for a loan first.

Black Country Enterprise Loan Fund

Under this fund, small business loans from £500 to £10,000 are available for
businesses starting or growing in the Black Country districts of Wolverhampton,
Walsall, Dudley or Sandwell. Under a straight-forward application process, the
fund will examine the business plan of any viable small business in the area that
cannot raise all the finance it needs to start or expand from commercial sources.

Call 07875 199262 or email

Black Country Reinvestment Society

BCRS assists small businesses in the Black Country that are unable to raise
finance from banks or other sources. BCRS is a Community Development Finance
Institution that makes loans to start-up businesses, existing businesses
employing less than 250 people and social enterprises.

BCRS loans are between £10,000 and £50,000 for any legitimate business
purpose over 1 to 5 years at a rate of interest that reflects the lending risk.

To download and application form, or for more information, call 01384 342 819 or

September 2009                                                                    15
Community Development Finance Institutions

If a commercial bank cannot help you raise finance for your business, it is worth
considering a loan from a Community Development Finance Institution. (CDFI).
These are independent organisations that have the social objective of widening
access to finance, and operate on a not-for-profit basis.

In the West Midlands a group of CDFI have formed the „Fair Finance Consortium‟
to raise awareness of their lending activity. Many of these are mentioned in this
guide on their own account, such as Aston Reinvestment Trust and Arrow Fund.

The Fair Finance Consortium can be contacted on 0121 230 1068
Or visit

Regional Community Loan Fund (Social Enterprises)

Social Enterprises in the West Midlands can apply for financial support to assist in
economic regeneration or social inclusion. The minimum loan is £15,000 and the
maximum is £85,000.

The organisation must be a charity or not for profit. It must have a business
plan showing the ability to repay the loan and be unable to access all the funding
needed from traditional sources.

Contact the Local Investment Fund on 0121 378 2198 or visit

Co-operative & Community Finance

This organisation has provided loan finance for Co-operatives, employee owned
businesses and social enterprises for 30 years.

CCF lends money for social purposes and collective benefit that has been raised
by a public share issue. It offers business loans under an ethical investment
policy financing only projects for the public good.

Loans are provided over repayment periods up to ten years. They can be for
property purchase, working capital, fixed asset purchase or to repay existing
borrowing. Loan interest rates vary depending on the borrowers circumstances,
and can range in size from £5,000 to £50,000. New borrowers cannot normally
borrow more than 50% of their financial need from CCF. Security is sought where
available, but not personal guarantees.

Applications can be made on line, and must include a comprehensive business
plan with financial projections and audited accounts (for existing businesses)

For more information visit or call 01179

September 2009                                                                    16
Coventry and Warwickshire Reinvestment Trust

CWRT is a Community Development Finance Institution that makes loans to small
businesses and social enterprises in Coventry, Warwick, Leamington, Kenilworth,
Rugby and Atherstone. The criteria for lending are; benefit to the community,
generating employment and the lack of access to commercial finance.

Loans can be from £500 to £40,000 over terms of six months to ten years. CWRT
does not charge an arrangement fee or an early repayment penalty. The rate of
interest will reflect the circumstances and cost of the loan.

Visit or call 0845 606 6216

Factoring and Invoice Discounting

Factoring improves cash flow by releasing funds tied up in unpaid invoices. It can
also maintain a full sales ledger and credit control service for a client business.
Ongoing credit checks are carried out to minimise bad debt problems.

Invoice discounting is similar to factoring but does not include the sales ledger or
credit control function that is left in the hands of the client.

There is a wide range of financial institutions that provide factoring and invoice
discounting.   A general description and additional advice is contained at

Future Builders England

Future Builders is a Government supported investment fund for the voluntary and
community sector.       FBE provides a combination of loans and grants for
organisations that deliver public services and earn revenue through contracts with
public sector agencies. It is an important finance vehicle for social enterprises.
The finance is designed to improve an organisation‟s ability to deliver public
services in education, health, or social care.

The minimum loan is £30,000, and the maximum is £50,000. Loans are charged
at up to 6% interest (variable), and are to be repaid over a fixed term of up to 25
years. In addition the fund can offer grants if the applicant can demonstrate
need. The grant must be part of a financial package with a larger loan. In
addition the fund can offer development grants to organisations with potential to
grow, prior to a future loan application.

Applications must be made on-line. An application can take three to six months to
assess, and if approved applicants must draw down their loan within 12 months.

Visit or call 0191 261 5200

September 2009                                                                   17
Impetus (Rural)

Impetus is a Community Development Finance Institution within the Marches
Rural Reinvestment Trust. It supports access to finance for businesses in the rural
communities of the Marches, covering Herefordshire, Worcestershire and

Business loans of £1,000 to £40,000 can be made to individuals or organisations,
and these are repayable over a period of up to five years. Applicants must live
and work in the target area, prepare a business plan and take advantage of
business support. Borrowers must have tried to use commercial sources of
finance to meet their needs.

Visit or call 01684 893883

Michelin Development Fund           (North Staffordshire)

Multinational tyre-maker Michelin sponsors a development fund in North
Staffordshire. This can provide unsecured loans to SME‟s from £5,000 to be
repaid over a period of three to five years at Bank of England base rate interest.
It is a general requirement that the business owners invest some of their own
money in the business. Michelin also offers free business advice to its borrowers.

Applications from manufacturing or service businesses in Stoke and Newcastle-
under-Lyme are given priority. The loans can be used for any legitimate business
purpose that supports job creation.

Visit or call 0800 057 2007

North Staffordshire Risk Capital Fund

NSRCF was set up by local businesses to provide finance for economic
regeneration in North Staffordshire. It makes unsecured loans to new and
existing enterprises in the area that have potential for sustainable growth.

Loans can be from £10,000 to over £50,000 with an option to share in future
profits. The fund is especially interested in knowledge-based and innovative
businesses run by experienced or ambitious management. Applicants must
prepare a business plan, and their application will be assessed by an investment

Visit or call 01782 266408

Business Tax Payment Support Service (2009)

If a business anticipates that it will have difficulty in meeting Tax, VAT, National
Insurance or other payments due to HM Revenue & Customs they can call the
Business Payment Support Line (open 7 days a week) and HMRC staff will review
the circumstances and discuss options including longer time to pay. Any such
arrangement will not attract additional late payment surcharges, but interest on
late payments will apply in the normal way.

September 2009                                                                   18
If a business wishes to contact this service they must call 0845 302 1435 as soon
as possible with; their tax reference, details of payments due and basic
information about their business income and expenditure.

The Prince's Trust (18-30 years)

The Prince‟s Trust is a nation-wide organisation operating from 53 area offices
that has helped thousands of young people successfully set up in business.

The trust offers loans at preferential rates of interest of up to £4,000 towards
essential start-up costs.

     Aged between 18 and 30 (inclusive)
     Unemployed or underemployed (i.e. very low paid/casual work)
     Limited funds

The Prince‟s Trust also offers a comprehensive “aftercare” programme for each
business supported during the first three years of trading. This includes a
volunteer Mentor to provide advice and support, European Marketing grants to
enable a business to visit other potential markets or suppliers abroad, and a
subsidised exhibitions programme.

If you require any further information call on 0121 689 6898
or visit

Prime Initiative (Over 50’s)

The Prince‟s Initiative for Mature Enterprise (PRIME) was established by the
Prince of Wales to encourage people over 50 years of age to start new

Prime has a loan scheme in association with Zopa and the Bank of America. The
scheme provides personal loans of up to £15,000 at between 4 and 15% interest.
Loans are to be repaid over one to three years. You must be over 50 years old,
have a viable business plan and not taken out any other loan in the last four

For more information on self-employment at a mature age, contact 0800 783
1904 (helpline) or visit

Royal British Legion (Ex Services)

The Small Business Loan Scheme helps ex-Service people who are unemployed
and planning to start up their own business. Loans up to £5,000 are available
interest free, repayable over 3 years.

There is an administration charge of 10% of the loan to a maximum of £250
repaid over the period of the loan. A Security Fee of 5% of the loan is also
charged, which is returned once the loan has been repaid (providing there have
been no defaults of any kind).

September 2009                                                                19
Applicants must be ex-service people eligible for Ordinary Membership of the
Royal British Legion, unemployed and under 60 years of age.

For more information contact 01980 847753 or visit

Enterprise Finance Guarantees

To increase the supply of credit for working capital and investment to small and
medium sized businesses the UK Government provides guarantees to
participating banks and other financial institutions to cover 75% of any eligible
loan or overdraft from £1,000 to £1m.

The decision top make a loan is delegated to the bank, which applies to the
Department of Business Enterprise and Regulatory Reform. Loans are made on
commercial terms and the borrower pays a premium of 2% interest, and
arrangement fee. For more information visit or
approach a bank directly.

Supporting British Business in the Current Economic Climate

The Government, through the Department for Business Enterprise and Regulatory
Reform has announced measures to help businesses in the present economic

      Banks accessing Government support have committed to maintain levels
       and prices of lending at a level at least equivalent to 2007.

      Central Government will pay all bills within 10 days

      Business Link will provide advice and a free financial health check to all
       businesses on demand.

      Through Train to Gain SME‟s in England can access extra support for the
       skills development of employees.

      The Government has announced a £1 billion guarantee fund to support
       small exporters

      The Government has announced a £50 million fund to convert businesses
       debt into equity.

      The Government has announced a £25 million transition loan fund for the
       West Midlands.

Information about all of this support can be found            on and

September 2009                                                                20
Social Enterprise Loan Fund (SELF)

This is a fund that aims to help charities and social enterprises to grow. These
are organisations committed to any of the following causes; the relief of poverty
or need, education, health, community development, arts, amateur sport, the

SELF can provide loans for;

      Property Purchase or Improvements where loans of up to £250,000 can be
       repaid over 10 years at interest of up to 3.5% over base rate.

      Loans to purchase fixed assets under £100,000 up to 90% of value
       repayable over 5 years at interest of up to 4% over base rate

      Loans for working capital of up to £50,000 up to a maximum of 90% of
       the capital required and repaid over three years at 5% interest over base

Visit or call TSELF Midlands on 0115 974 6299

Midlands Community Finance (East Staffordshire)

Midlands Community Finance (MCF) is a Community Development Finance
Institution based in Derbyshire that also lends to small businesses and individuals
in East Staffordshire. Their primary focus is on Burton on Trent, Uttoxeter, and
Stoke on Trent.

Loans made to social enterprises, business start-ups and developing businesses
unable to raise commercial finance are between £1,000 and £10,000. Interest
rates vary but are around 14% for loans of over £4,000.

Call 01332 365550 for further details or visit

September 2009                                                                  21

Advantage Business Angels (ABA)

Entrepreneurs seeking to raise finance can register their proposal for free on the
ABA website Within 48 hours ABA will then
allocate a deal manager to those businesses it feels it can assist, who will then
assess the proposal.

ABA can develop a funding plan and investment proposal and promote the
opportunity to over 700 investors via its monthly newsletter, website and
presentation events. Through these introductions, potential investors meet
entrepreneurs and negotiate the amount of equity finance, and the profit share
required. When a deal is struck a commission on the finance raised will be
charged by ABA to the entrepreneur.

To register your proposal or find out more about ABA services visit the ABA
website on or telephone 0845 833 0103

Advantage Creative Fund

ACF is a £5million venture capital investment fund for growing creative
businesses in the West Midlands. It seeks to make a return on its investments
like any other investor, but it will reinvest profits in further support. Creative
businesses include those in music, design, film, broadcasting and fashion. Such
businesses often have difficulty in raising finance, and ACF seeks to fill the gap.

The fund can invest up to £250,000 in creative businesses with growth potential.
The fund assesses business plans and will support start-ups and existing
enterprises. It will take a shareholding in a growing business, and seek to look
towards selling that holding at a profit within 3 to 7 years. The shares may be
sold back to the original owners. The fund may appoint a director to represent its
interests on the board of any company supported.

The website is and telephone number is 01543

Venture Capital

Venture capital is normally only available to companies seeking large amounts of
capital, usually over £1 million. It involves selling shares in a company to a
financial institution which usually also takes a seat on the board. The original
owner managers often reserve the right to buy back the shares in the future.

The British Venture Capital Association is the representative body for the UK
Venture Capital Industry. They publish material for those looking to raise venture

Contact BVCA on 0207 240 3846 or

September 2009                                                                  22
Advantage Early Growth Fund

The Advantage Early Growth Fund (AEGF) is a venture capital „co-investment‟
fund set that assists early stage businesses with growth potential. Its investments
are between £10,000 and £100,000. It will invest by buying an equal amount of
shares in early stage companies, on the same terms as a „private‟ investor. In
other words, it can match that investment. In this way AEGF can double the
investment capital of a growing business.

AEGF is open to applications from commercially viable businesses in any sector
seeking to expand. It does not charge an arrangement or management fee, and
seeks to make a return on its capital of 6% per annum. It will enter into an
individual investment agreement in the case of each company.

Contact Advantage Early Growth Fund through the web site
or call 07973 386443.

Advantage Enterprise and Innovation Fund

Advantage West Midlands has created a venture capital fund specifically for small
and medium sized businesses seeking to finance growth. It is a co-investment
fund, and can invest between £250,000 and £1million in companies able to raise
the same amount from the private sector.

The AEIF will support West Midlands companies involved in technological
development, innovation, modernisation and diversification. It can provide a
mixture of equity and loans.

The fund is managed by Catapult Venture Managers Ltd from their Birmingham
office, and their investment team examine proposals. Visit www.catapult- or call 0870 116 3000 for more information.

Advantage Growth Fund

The Advantage Growth Fund makes equity investments of below £500,000 and
seeks to invest in 100 companies over five years. Its aim is to help fill the „equity
gap‟ created by the unwillingness of venture capital companies to invest less than
half a million pounds in a company.

The fund is sponsored by Advantage West Midlands and managed by Midven
Limited from their office in Birmingham. It works with other initiatives including
Selective Finance for Investment, business incubation projects and the Mustard
programme for high-growth start-ups.

The fund seeks opportunities to buy shares in competitive companies in niche
markets that are capable of at least £1 million sales per year. It is keen to
support start-ups. Applicant companies must have a clear business strategy, a
strong management team, robust financial information and projections, offer a
good return and be able to pay back the investment according to its business

For further details     call   Midven   Limited   on   0121   710   1990    or   visit

September 2009                                                                     23
Adventure Capital Fund

ACF invests in organisations that work in and for local communities. It offers
practical and financial support to help organisations to become self-sufficient and
less reliant on short-term grants.

ACF provides finance to organisations that cannot raise capital elsewhere. This
can come in the form of loans, or sometimes gift capital for specific needs.

The types of investment carried out by ACF are;
    Seed Capital of £25,000 to £100,000 for pre-launch costs or product
    Working Capital of £25,000 to £100,000 to strengthen cash flow
    Major Investments of £50,000 to £400,000 for the purchase of assets

The investment products of ACF are
    Patient Loans of up to 10 years term with repayment holidays if necessary
    Shared Profit arrangements, that may involve a royalty agreement
    Gift Capital that is not repaid in full, but earns a very specific social return.

Visit or e-mail

Bridges Ventures

This is a major community development venture fund that can buy shares in
community enterprises with high growth potential. The fund looks for investment
opportunities including early stage expansion finance and management buy-outs.

The fund invests only in those districts that are considered by the index of
multiple deprivations to be the most disadvantaged areas of England. It is
advisable to check if the area of the West Midlands in question is included via the
Bridges Ventures website. It invests in projects that bring strong social benefits
in health, education and the environment.

Contact or call 0207 262 5566.

Private Investors (‘Business Angel’ Finance)

Businesses seeking significant capital for expansion frequently look for private
investments from individuals or organisations known as business angels. In this
case the company seeking finance sells a percentage of its shares to an investor in
return for a cash injection. To find a private investor, it may help to consult
registers or networks of people interested in investing in new or small business.
The investor will agree a strategy with the company so that the investor can sell
the shares at a profit in three to seven years. Investors are looking for a return in
proportion to the risk of the investment, and stand to lose all their money if the
company is not successful.

Guidance can be obtained through British Business Angels Association on 02070
892 305 or visit There are „business angel‟ networks in the
West   Midlands    of   which   some      of   the   most    prominent    are        and

September 2009                                                                     24
Coalfields Enterprise Fund

CEF provides finance for growth orientated companies and entrepreneurs in
former coalfield areas. It is open to businesses at any stage of development from
start-up to buy-out, and the fund can also give business advice and guidance.

The fund can offer finance in the form of loans or an equity stake in the form of
preference shares. Its support can range from £40,000 to £500,000. This finance
may not exceed 50 per cent of the total funding requirement.

A detailed description of those former mining areas within the West Midlands in
which the fund operates is available on the website www.coalfields-enterprise-

For further information call 0870 766 8238

Connect Midlands

Connect Midlands is a not for profit network linking high-potential technology
businesses and entrepreneurs with business training, and access to finance. Its
specific aim is to help early stage companies to secure equity based finance of up
to £5 million through a programme of events and training.

This programme provides seminars and workshops for science, engineering and
technology companies seeking £15,000 to £3,500,000. This programme of
„investment readiness‟ includes coaching on financial planning, presentation
review and guidance through the legal and completion process of securing

A one-day event for entrepreneurs enabling them to pitch their ideas to a
carefully selected audience of potential investors in a supportive environment.

Round Table
An invitation only meeting between 12 investors and 4 companies, where the
prospects for investment can be discussed and deals proposed.

The Investment Conference
A platform for technology companies to present their plans for growth to high net
worth individuals and corporate financiers, looking to invest up to £5 million.

For more information visit or call 0247 632 3320

September 2009                                                                 25
Enterprise Capital Funds

Enterprise Capital Funds have been established to enable SME‟s to gain access to
finance for growth. These funds invest sums between £500,000 and £2.5m. There
are 6 funds designed to bridge the „equity‟ gap where commercial venture capital
companies consider the investment too low.

IQ Capital Fund focuses on technology based SME‟s

21st Century Sustainable Technology Growth Fund focuses on high growth
companies employing leading edge sustainable technological innovations.

Seraphim Capital Fund covers all sectors and invests in companies alongside
private investors at the early stage of their development.

Amadeus Enterprise      Capital   Fund   providing   seed   capital   for   technology

Catapult Growth Fund supporting innovation by early-stage businesses.

Dawn Capital Fund investing in technology-driven companies creating new

For more information visit or call 0207 215 5000.

The Halal Fund (Islamic Finance)

The Halal Fund is a non-interest based business investment fund. It is aimed at
Islamic entrepreneurs who do not take up business finance that requires the
payment of interest for reasons of genuine religious conviction.

The Halal Fund offers loans up to £7,500 repayable over three years without
interest, but subject to a share of profits in years 2 and 3. It can also offer equity
(or share) capital up
to £35,000. The fund will invest selectively, and look to be a minority investor in
high growth, ethical businesses capable of paying a return on investment. Retailing
is excluded.

For further information on how to apply telephone 0121 772 7020.

Mercia Technology Fund

West Midlands Enterprise provides consultancy and investment services in the UK
and internationally. It is an independent venture capital provider making niche
market equity investments in SME‟s and delivering post-investment support.

It is sole adviser to the Mercia Technology Fund, which is one of the
Government‟s „University Challenge‟ investment vehicles sponsored by the
Universities of Birmingham and Warwick.

September 2009                                                                     26
The fund can invest up to £250,000 as seed corn capital for businesses with a
strong technology or intellectual property element. Deals often arise from the
research departments of West Midlands Universities.

For more information visit or www.wm- or call 0121 236 8855

UK Steel Enterprises

A wholly owned subsidiary of Corus, UK Steel Enterprises provides financial and
other support to new businesses in areas that formerly depended on steel
manufacturing for the generation of jobs. With the closure of steelworks, there
have been many former steelworkers who now consider self-employment as an
option. UKSE can help any small business in former steel-making areas.

UKSE can offer two types of financial support;

Share Capital of between £25,000 and £250,000 up to 25% of the equity in a
new business.

Loans from £15,000 at a fixed rate of interest over a fixed repayment term of
three or four years

UKSE can also offer business advice and premises.

For more information visit or call 0114 273 1612

September 2009                                                                   27

Many people rely on their OWN FUNDS, or friends and family, to develop a
business. For others, this is not enough to finance the high start up or
development costs.

The main providers of external business finance remain high street BANKS, but
there are schemes and organisations working to help the self-employed, social
enterprises and companies excluded from commercial finance. These may offer
grants or loans, subject to specific criteria.

This guide can only summarise the major sources of business finance. It has been
designed specifically to provide simple information and contact details for the use
of SMALL AND START-UP BUSINESSES and their advisers. Although it is updated
during the year, schemes in this guide may run out of funds very quickly and
cease to operate.

For self-employed people whose business debts are creating a real problem the
service of BUSINESS DEBTLINE is free, independent and confidential. Part of the
Money Advice Trust, their experienced staff can help with advice on dealing with
creditors and which debts should be paid as a priority. Their telephone number is
0800 197 6026

A business owner should only decide to take up a source of finance after very
careful consideration. A discussion with an experienced business adviser can help
identify the best funding solution in the long-term interests of the business. Many
small businesses fail because they are under financed. Some take on a burden of
too much borrowing. It is essential to prepare a full BUSINESS PLAN with detailed
financial projections of future sales, expenses and profits, and a comprehensive
marketing strategy before applying for finance. Business planning increases the
chances of business survival.

BCT Business Venture can provide training, advice and
guidance in Business Planning, Marketing, and Financial
Management for start-up businesses.

Please call 0121 607 1880 for details.

Michael Byrne

BCT Business Venture, Birmingham Chamber of Commerce and Industry,
75 Harborne Road, Edgbaston, Birmingham B15 3DH.

September 2009

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